Regulation

The good news about our economy is that it hasn’t been struck down by some mysterious act of God. Acts of Government plague our nation – and acts of Government are entirely within our power to change.

Today I will not recite the dismal statistics behind the failed economic policies of this administration, nor the reasons why these policies have failed. The current Presidential campaign has plenty of that, and the fact is that every single American already knows the answer to Ronald Reagan’s simple question: “Are you better off today than you were four years ago.”

Today, I would instead like to look ahead to what the 113th Congress and the 45th President of the United States must do if we are to restore prosperity to this country.

I’d like to outline seven measures that I believe are absolutely essential to repair our economy and restore America as the most prosperous and productive nation in the world.

FIRST AND FOREMOST – IT’S THE SPENDING, STUPID.

Unless and until we dramatically reduce federal spending and the accompanying tax and debt burden, government will continue crowding out private capital and destroying job creation.

Three numbers tell the story very nicely: 39, 32 and 82. Thirty-nine percent is the rate of inflation and population growth combined over the last ten years between 2002 and 2012. Thirty-two percent is the growth rate of revenue in the same period – despite the tax cuts and the recession. Not quite keeping up with inflation and population growth, but pretty close. Eighty-two percent is the figure that’s killing us. Eighty-two percent is the growth of federal spending.

While I’m not sure I always buy whole-hog the amorphous concept of “regulatory uncertainty,” brought on by the administrative state, as a catch-all explanation for everything wrong with the private sector and our nation’s current unemployment crisis, a fascinating Bloomberg Businessweek Global Economics feature from May 2012 looks at French labor policy (emphasis mine):

[France] has 2.4 times as many companies with 49 employees as with 50. What difference does one employee make? Plenty, according to the French labor code. Once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.

French businesspeople often skirt these restraints by creating new companies rather than expanding existing ones.

Legislators in Washington are at it again, working tirelessly to ruin a perfectly good Internet.

Maybe it would be different if they consulted with leaders in technological advancements to find out the implications of an idea. Or maybe they could ask what technology might break because of a bill. But that’s not how it works.

I imagine the Congressional discussions of Internet manipulation to be like a group of senior citizens sipping coffee at McDonald’s at 5:00 a.m. and fussing about those “dagburned Internet machines” taking over life as they once knew it.

Surely it can’t be that way, but when you read the legislation, you have to wonder.

SOPA and PIPA threatened to do all sorts of bad things to the Internet. There was a whole list of problems with that legislation, and though massive Internet protests managed to derail the bills, it’s worth noting that if not for those protests, SOPA and PIPA would have been passed with much bipartisan support.

Then CISPA came along, and while it wasn’t a brutal pillaging of core Internet technologies like SOPA and PIPA, it would have opened the door for some serious privacy issues. With full cooperation from the Heritage Foundation (which was an outright betrayal of the American public), House Republicans managed to pass CISPA and send it to the Senate, where it fortunately hasn’t gone anywhere – yet.

Joel Aaron, Grassroots Director for the Georgia chapter of Americans for Prosperity, sent along this piece about the REINS Act, which would curtail regulations placed businesses and, ostensibly, consumers. It’s tailored to Georgia, but this is an issue that Democrats in swing districts across the country may have to contend with in 2012.

Last week, Georgia Democrats John Barrow and Sanford. D. Bishop, Jr. casted votes in favor of alleviating excessive regulatory burdens with minor procedural hindrances. Today, Georgia legislators have the opportunity to confront Washington’s over-regulation problem head-on, by supporting the Regulation from the Executive in Need of Scrutiny (REINS) Act.

The REINS Act was inspired in 2009 when Kentucky activist Lloyd Rogers approached U.S. Representative Geoff Davis after EPA water regulations had doubled his county’s taxes without so much as a congressional vote. Unelected, unaccountable bureaucrats should not have the power to make laws in this country, plain and simple. This basic, founding principle is given to lawmakers who must account for their votes and listen to the voice of the people they represent.

Rogers challenged Rep. Davis with language from the U.S. Constitution which says “all legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.” Rep. Davis took this challenge to Washington and thus H.R. 10, the REINS Act, has become a centerpiece of the Republican House agenda.

Earlier this year, the Louisiana legislature almost unanimously passed a law that prohibits the use of cash in secondhand transactions.

The story on this one is that the law is intended to create a paper trail when people steal things like copper or other materials from a construction site. Forcing a check, money order, or electronic payment would make it easier for law enforcement to find a thief. I understand that argument, but there are some real problems with this law.

U.S. currency is valid for all transactions. On the front of our currency is the line “This note is legal tender for all debts, public and private.” Prohibiting the use of legal tender is a bit of an oxymoron.

Records of each transaction must be kept for 3 years. When you hear people like me fussing about unnecessary government regulations hindering businesses, this is the type of thing we’re talking about. This law requires businesses to keep very specific records for each second hand transaction so that law enforcement can find people they suspect are thieves.

The information to be collected by the dealer includes: date, location of purchase, name and address of seller, driver’s license or passport number of seller, license plate of vehicle used to deliver the goods, a full description of all materials being purchased.

Under President Obama, while the economy is struggling to grow and create jobs, the federal regulatory business is booming.

Regulatory agencies have seen their combined budgets grow a healthy 16% since 2008, topping $54 billion, according to the annual “Regulator’s Budget,” compiled by George Washington University and Washington University in St. Louis.

That’s at a time when the overall economy grew a paltry 5%.

Meanwhile, employment at these agencies has climbed 13% since Obama took office to more than 281,000, while private-sector jobs shrank by 5.6%.

If you missed my piece the other day on recession-proof DC, check it out.

Also, pick up a copy of Iain Murray’s Stealing You Blind. In addition to being a scholar at the Competitive Enterprise Institute, Murray is an Englishman whose legal immigration to the U.S. took four years, no thanks to our bloated, inefficient bureaucracy.

The Department of Energy is looking to create a a regulatory subcommittee of vetted stakeholders to develop energy efficiency standards for electricity distribution transformers:

SUMMARY: The U.S. Department of Energy (DOE or the Department) is giving notice that it intends to establish a negotiated rulemaking subcommittee under ERAC in accordance with the Federal Advisory Committee Act (FACA) and the Negotiated Rulemaking Act (NRA) to negotiate proposed Federal standards for the energy efficiency of low- voltage dry-type distribution transformers. The purpose of the subcommittee will be to discuss and, if possible, reach consensus on a proposed rule for the energy efficiency of distribution transformers, as authorized by the Energy Policy Conservation Act (EPCA) of 1975, as amended. The subcommittee will consist of representatives of parties having a defined stake in the outcome of the proposed standards, and will consult as appropriate with a range of experts on technical issues. DATES: Written comments and requests to be appointed as members of the subcommittee are welcome and should be submitted by August 29, 2011.

So the government is looking for parties with “a defined stake” — meaning entities operating in distribution transformer space, from electricity companies and device manufacturers to green groups and (probably) well-heeled and connected Democratic donors — to appoint (not elect) to a committee responsible for promulgating efficiency criteria that will eventually have the force of law.

In Midway, Georgia, local police have stopped a crime cold. No, they didn’t thwart a jewel heist in progress. They didn’t stop a murder. The instance I’m talking about doesn’t even catching the guy who knocked over a convenience store. No, they stopped some really hardened criminals. They got a couple of kids with a lemonade stand.

Three Midway girls wanted to pay for a trip to a water park. They needed money, so the set about making it. They were going to make it the old fashioned way. They wanted to earn it. However, they didn’t get a business license, a peddler’s permit, or a food permit. That is a $50 per day cost, or $180 per year according to Fox-5 in Atlanta that reported this vigilance of local police officers.

This isn’t particularly unusual either. This has happened, and for similar reasons, all over the country. Lemonade stands, which once were a great way to teach kids how to actually make money for themselves, now serve as a harsh lesson in governmental control. No business is allowed to start up without the government extracting it’s pound of flesh first.

Make no mistake, the Midway Police are part of the problem as well. In most communities, police do act with enough discretion to recognize a couple of kids with a lemonade stand and let it go. Few people honestly expect a kid’s lemonade stand to have been inspected by the health department or any such thing. They purchase it because they want to help out a couple of kids who aren’t asking for a handout, but hoping to make an honest buck. Most local cops see it, maybe smile to themselves, and move on…if they don’t buy a glass of lemonade themselves.

The rogue Internet hacker group @Lulzsec has disbanded after a two-month battle against targets across the world. In the wake of their attacks are many questions. How can organizations protect themselves against such attacks? How long will other hacker groups continue their cyberwars? And, is what they’re doing actually…ethical?

Without question, hacking is illegal. Yet, despite the illegality of what hacker groups like Anonymous do, there does appear to be a “moral code” to their actions. For example, Anonymous recently took down several Orlando-area websites, including Orlando Mayor Buddy Dyer’s re-election site. Why would an international hacker collective target Orlando? They felt arresting members of Orlando Food Not Bombs, a charitable organization that feeds the homeless in city parks, was wrong. “Anonymous believes that people have the right to organize, that people have the right to give to the less fortunate and that people have the right to commit acts of kindness and compassion,” the group stated in a release.

Wait, a hacker group that stands for “kindness and compassion”? Are there really “hacktivists” out there? Apparently.

Black markets come to life after government regulations force the natural economy underground. Anonymous is fueled by a similar mechanism. The traditional (and, legal) methods of counter-balancing government abuse have ultimately failed. Freedom of Information Act requests are frequently sidestepped, or altogether ignored. The Mainstream Media — both Left and Right — have become nothing more than cheerleaders for whatever administration is in charge. And, real investigative journalism, like that of gadfly James O’Keefe, is far too rare. Nobody is left to watch the watchers.

Speaking on matters that concern the business community with which the president has had a rocky relationship, Obama said, “The perils of too much regulation are matched by the dangers of too little.”

But, he said, regulations also serve a purpose.

“Already we’re dramatically cutting down on the paperwork that saddles businesses with huge administrative costs,” he said. “But ultimately, winning the future is not just about what the government can do to help you succeed. It’s about what you can do to help America succeed.”

He added, “We cannot go back to the kind of economy — and culture — we saw in the years leading up to the recession, where growth and gains in productivity just didn’t translate into rising incomes and opportunity for the middle class.”

The president took the opportunity to defend two of his primary legislative achievements — a Wall Street banking bill and health insurance reform.

“I know you have concerns about this law,” he said of the health law. “But the nonpartisan congressional watchdogs at the CBO estimate that health care tax credits will be worth nearly $40 billion for small businesses over the next decade.”

Of course, he neglects to point out that the “nonpartisan congressional watchdogs at the CBO” are hamstrung in how they can figure up their numbers, so you can trust what they say about as much as you can trust Paris Hilton to score perfect on the SAT.